Rupert Murdoch was inclined to settle the Dominion case - but it took a secret mediator to make the deal

For months, as the pretrial proceedings wore on and the embarrassing internal messages kept spilling into public view, executives at Fox News slowly resigned themselves to a miserable slog of a trial followed by a possible loss before a jury in the blockbuster $US1.6 billion ($2.38 billion) lawsuit by Dominion Voting Systems.

Viet Dinh, the highest-ranking legal officer at Fox News’s parent company, Fox Corp., had offered a glimmer of hope. He had walked company founder and chairman Rupert Murdoch and his son Lachlan, who is Fox’s chief executive, through the legal issues and reassured them that the company could eventually prevail on appeal, even if it required going all the way to the Supreme Court, according to people familiar with the internal deliberations who spoke on the condition of anonymity to describe confidential conversations.

The Murdochs were assured that eventually they would win the case even if they had to take it on appeal to the Supreme Court. Credit: Bloomberg

But at the close of Friday’s hearing in the blockbuster defamation case against Fox News, Judge Eric Davis of Delaware Superior Court asked the lawyers for both companies to try to work out their differences. Trial was set to begin on Monday, and he implored them to see if they could find common ground.

The two sides obliged, and their lawyers spent the weekend attempting to hammer out a deal without getting far. The space between them was still vast. Running out of time, they sent an emergency email Sunday morning to longtime mediator Jerry Roscoe, who was floating down the Danube River.

As calculations by both companies slowly played out, the stakes were clear, not just for them but for the news media and even for the country itself: Dominion was seeking accountability for Fox’s role in spreading the false claim that Dominion machines had been used to steal the White House from former president Donald Trump, a democracy-shaking lie that helped spark violence on January 6, 2021, and, more than two years later, this consequential defamation battle in court.

But now, there was one last shot for resolution on the eve of the most highly anticipated libel lawsuit in a generation.

“Would I be willing to mediate an important case?” Roscoe said, recalling the dramatic email he received while on holiday.

Roscoe said he was soon reading thousands of pages of documents, scrolling through them on his phone overnight in preparation for swooping in at the last minute to try to end the dispute.

Publicly, there was no sign of change in the posture of the two companies. So it was a surprise Sunday night, as dozens of reporters were checking into their hotels in Wilmington, Delaware, girding themselves for a weeks-long stay, when a strange note was circulated by the public information officer for the court: Judge Davis would delay the trial by one day. No explanation was provided, only an assurance that Davis would say more in court the next morning.

Two people familiar with the case told The Washington Post on Sunday night that the delay was to allow time for the two sides to try to reach a deal. The talks were coming at the insistence of the judge, one said, lowering expectations of success.

Journalists were readying themselves for the start of the Fox trial unaware that mediation was underway.Credit: Bloomberg

But behind the scenes, Roscoe said, he commissioned calls with lawyers for both sides, trying to feel out their red lines. On Monday morning, he brought them together for their first call.

An hour later, Davis gaveled the court into session only briefly to announce that he would proceed with seating a jury in 24 hours and declared that such delays in complicated suits were hardly “unusual.” Dominion sent just one lawyer to sit in the courtroom for Davis’s low-key remarks, a hint that the real action might have been taking place elsewhere.

Roscoe said expectations were muted at first. The companies’ lead trial attorneys, Justin Nelson for Dominion and Dan Webb for Fox, had minimal roles, too busy continuing to prepare for the planned courtroom clash.

“The parties weren’t too optimistic that it was going to resolve,” he said.

Fox staff and executives had watched in horror as their unvarnished, and often vicious, internal messages about one another – and Trump – became public throughout the pretrial proceedings. Many of Fox News’s top executives, including CEO Suzanne Scott, arrived at the network at its founding, and some have never worked anywhere else. And since Roger Ailes, Fox News’s late co-founder, was forced out in a sexual harassment scandal in 2016, Fox has operated without a domineering force leading it.

Fox has lacked a domineering head since Roger Ailes was forced to resign.Credit: AP

Inside Fox, as the trial date neared, staffers dreaded the witness testimony that might come with it. Rupert Murdoch was expected to be called second in the witness lineup, right after Dominion’s PR representative, Tony Fratto, according to people familiar with the witness lineup. Lou Dobbs was expected to be the third witness. High-profile Fox News hosts such as Maria Bartiromo, Tucker Carlson, Jeanine Pirro and Sean Hannity were also expected to be called, along with several behind-the-scenes staffers.

Revelations from pretrial discovery had been excruciating for the cable network, exposing a backbiting internal culture that featured employees who regularly doubted the content that aired nightly for millions of viewers. They privately rejected the myth that Trump had won the election, even as the network put forth conspiracy theories in the weeks after the November 2020 election.

Murdoch’s testimony loomed. His lengthy deposition, administered over two days, was internally inconsistent and promised a bonanza for Dominion’s lawyers.

The judge had issued stinging adverse rulings for the company, including that Fox News had aired falsehoods about Dominion that had harmed its reputation. A jury would be left to decide only if it had done so knowingly or with reckless disregard for the truth.

But Fox had insisted publicly it was standing up for the First Amendment by refusing to settle, claiming that Dominion was unfairly blaming it for airing allegations that at the time were being promoted by the president and his lawyers.

Despite the reassurance from Dinh, a trusted Murdoch adviser (and godfather to one of Lachlan’s sons), who had taken on an outsize role at Fox Corp., Murdoch himself was inclined to settle the matter financially, as he has done many times in his career, the people familiar with the Fox deliberations said.

After that first call Monday morning, others quickly followed. Over Monday and into Tuesday, Roscoe estimated that he conducted as many as 50 calls with both sides. Some were long, others short, some on Zoom, others traditional phone calls. Lawyers and company executives joined, he said. When asked if Rupert Murdoch had joined the calls, Roscoe said that no potential witnesses had been part of the discussions with him.

“We were on the phone nonstop,” he said. “Emotions ran high.”

Fox News attorney Daniel Webb was preparing to go to trial as mediation was going down to the wire.Credit: AP

By Monday evening, they still hadn’t made progress, and both parties went to bed expecting a trial the next day. On Tuesday morning, the lawyers suited up and headed for the courtroom.

But outside the courtroom, Roscoe was making headway.

For the holidaying mediator, that required calling in from his hotel, a boat, even a bus, holding his phone in his winter coat for privacy.

Roscoe said that he quickly ascertained that Dominion’s monetary demand was not the only issue keeping the two apart. They were also divided by a dispute over the language that Fox would release acknowledging the court’s ruling that Fox had spread falsehoods about the company.

But over many calls, the sides got closer.

“Both sides had good lawyers and wanted to see if they could resolve the case,” he said. “But I wasn’t sure we would resolve it until it was actually resolved.”

Fox’s concern about the jury trial deepened last week, when Davis admonished the company for not being forthcoming about Rupert Murdoch’s position as executive chairman of Fox News, a role that put the 92-year-old executive in closer proximity to the news network than simply as chairman of Fox Corp. overall. The judge said he planned to open an investigation into Fox over its disclosures.

Fox argued in court that Dominion’s actual revenue figure in 2022 was the second-highest in its history and exceeded its projections for that year, even after Fox’s allegedly defamatory statements. That, in Fox’s view, cut against Dominion’s claim that its business had been severely damaged by Fox.

In addition, Fox gained confidence from an email its lawyers received Friday from Dominion saying that Dominion was not going to “be presenting its claim for lost profits damages to the jury, given that it is duplicative of the lost enterprise value damages.” While Dominion always stuck to its claim of $1.6 billion, people familiar with Fox’s thinking say the company’s lawyers felt they had finally been able to publicly dent Dominion’s central claim.

Fox executives were also concerned that settling with Dominion could cause Smartmatic, another voting technology company suing the network, to demand an equally large payout. “If you give a large settlement here after discovery, it sets such a bad precedent,” one person familiar with the discussions said.

The consequences of the lies were plain: For the country, they contributed to the violent attack on the US Capitol on January 6. For Dominion’s business, the lies resulted in efforts by GOP officials in states and counties around the country that had been using Dominion software and voting machines for years to ditch the company. For the company’s executives and even low-level employees, they sparked a flood of violent threats that did not abate.

Publicly, no news leaked out Monday, even as Dominion’s legal team was spotted coming in and out of a conference room space they had reserved at a hotel near the Wilmington court complex. People close to the case warned that the talks had not been fruitful.

So at 9 am Tuesday, a trial seemed imminent, even to the parties involved. Lawyers for both sides packed tables in the well of the courtroom and a row of seats behind, so many that one Dominion lawyer was forced to perch, hanging off the bench.

Proceedings were smooth at first, with 12 Delaware residents chosen to serve as jurors and 12 more selected as alternates. Davis swore them in and gave standard jury instructions. Action would resume, he said, at 1:30 pm, as each side delivered an opening statement.

But when 1:30 pm arrived, Davis did not appear in the courtroom. For hours, the delay went unexplained. A CNN reporter tweeted that he had seen a top Fox lawyer showing a piece of paper to a lawyer for Dominion before the two went to a private room.

Just before 4 pm, Davis returned to the bench. “The parties have resolved the case,” he announced.

At Fox’s offices, top executives had been preparing to tune in to an audio line provided by the court to listen to opening statements and were as shocked as outside observers at the announcement. “They kept this incredibly close-hold until the very, very last minute,” one person familiar with the company said.

Jerry Roscoe interrupted his holiday to bring Fox and Dominion to a settlement.

It was nighttime in Romania, Roscoe said. “There was just a sense of relief and accomplishment.”

He declined to say which side seemed more interested in settling. “I think they both were interested in getting this matter behind them.”

Outside the court, a lawyer for Dominion told reporters that Fox had agreed to pay $787.5 million and declared that the truth had won out.

In a statement, Fox said, “We are pleased to have reached a settlement of our dispute with Dominion Voting Systems. We acknowledge the Court’s rulings finding certain claims about Dominion to be false. This settlement reflects FOX’s continued commitment to the highest journalistic standards. We are hopeful that our decision to resolve this dispute with Dominion amicably, instead of the acrimony of a divisive trial, allows the country to move forward from these issues.”

It was a far cry from the apology Dominion sought. But a Dominion spokeswoman said that the sheer size of the settlement was enough. “An apology is about accountability, and today Dominion held Fox accountable. Fox paid a historic settlement and issued a statement acknowledging that the statements about Dominion were false,” she said.

A Dominion executive said employees who had been with the company since the 2020 election were emotional and relieved about the outcome, which included some measure of outside validation that the claims had always been false.

John Poulos, chief executive officer of Dominion Voting Systems, centre speaks after settlement.Credit: Bloomberg

There was relief, too, inside Fox, as it was spared more of what one employee called “a traumatic” episode that had preoccupied Fox’s rank and file. Fox executives had also been convinced that Dominion’s lawyers would work to embarrass their stars - and especially Murdoch - on the witness stand, and they were pleased the solution meant those people would be kept out of court, a person familiar with the matter said.

The settlement will not be the end of the 2020 story for either company: Fox faces the other defamation lawsuit from Smartmatic, which has asked for $US2.7 billion. And Dominion is pursuing lawsuits against individuals and groups that pushed falsehoods about its products after the election, including One America News and Trump allies Rudy Giuliani, Sidney Powell and Mike Lindell.

Jeffrey Pyle, a First Amendment attorney and adjunct professor at Boston College School of Law, said the $US787.5 million payment was one of the largest libel settlements he had ever encountered. Both sides would have faced risks if they had gone to trial, he said, with Fox facing the prospect of having to pay far more if it lost. Revelations in the courtroom might have caused ongoing damage to the network’s reputation.

“This would have been a daily torture for Fox News to have this case go to trial,” Pyle said.

Two former elections officials who have been advocating for accountability over false claims after the 2020 election said they thought the size of the settlement was meaningful. “The dollar amount is so huge and so easy to understand if you’re a member of the public,” said former Kentucky secretary of state Trey Grayson, a Republican.

Democrat Kathy Boockvar, who as secretary of the commonwealth in Pennsylvania helped certify President Biden’s victory there in 2020 and has faced threats ever since, said the settlement would be particularly persuasive to large corporations, including Fox itself.

“Deterrence matters,” Boockvar said. “This sends a clear message to other networks and particularly to Fox as we enter the 2024 campaign season: They better think twice about purveying lies.

“Accountability takes many forms,” she said. “But dollars speak loudly to large corporations.”

The Washington Post’s Patrick Marley and Jeremy Barr in Wilmington and Elahe Izadi in Washington contributed to this report.

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